Daily Archives: August 4, 2015

Laissez-Faire: Fact or Fiction? (Part 1)

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Let us begin with an oft-repeated quote from the “Father of Western Economics”:

It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest. We address ourselves not to their humanity but to their self-love, and never talk to them of our own necessities, but of their advantages (Smith (1776); Book 1, Ch. 2).

The above quote is from the famed economist Adam Smith from his masterwork The Wealth of Nations and, like Marx’s Das Kapital and Plato’s The Republic, it is frequently cited but rarely is it ever actually read[1]. That being said, Smith is regularly mentioned and quoted when invoking the inherent nature of human self-interest. The idea is that world of goods and services goes round not out of altruism, but of each individual’s interest in their own happiness and gains. The baker does not through the process of making bread out of the kindness of his/her heart. Instead, the baker produces and sells bread in order to turn a profit and buy other goods and services s/he desires. Because of such behavior, Smith believes that we should neither expect nor demand others to act out of egalitarianism, but of egoism. Continue reading

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